Consumers urged to check Medicare drug plans

New regulations bring changes in pricing and coverage, shrinking options

The Elder Law Center in Madison has been getting 100 calls on some days from people seeking advice on picking a Medicare prescription drug plan.

"We are incredibly overwhelmed," said Julie Short, director of the Elder Law Center of the Coalition of Wisconsin Aging Groups, which staffs the state's helpline for the drug benefit known as Medicare Part D.

New regulations to eliminate duplicative plans and plans with low enrollment mean that thousands of people in Wisconsin will have to find a new prescription drug plan this year. But they shouldn't be the only ones shopping.

Everyone covered by Medicare is encouraged to take the time each year to ensure that their prescription drug or Medicare Advantage plan - an alternative to traditional Medicare - still is the best deal for them.

"You should look at it every year. Every single year," Short said. "Every year, there are changes."

Premiums, deductibles and covered drugs can change. So can someone's prescriptions, and the cost of those drugs can vary from plan to plan.

Next year also will bring an additional change: People will receive a 50% discount on branded drugs once they reach the coverage gap, or "doughnut hole," that kicks in once they spend $2,840.

The discount is the first step toward phasing out the gap by 2020 under the health care reform law.

The annual open enrollment period for prescription drug plans and Medicare Advantage plans began Nov. 15 and runs through Dec. 31.

Although fewer prescription drug plans will be available next year, people still won't lack for choices: 32 plans are being offered in Wisconsin.

Premiums range from $14.80 to $109.10 a month. The weighted average premium, which takes into account how many people are enrolled in the different plans, is projected to be $43.96 a month, up 2.3% from this year.

The projected increase in Wisconsin is less than the projected national average increase of 10%.

But costs vary from plan to plan and from region to region. Premiums for an estimated 2.6 million people nationally will increase by at least $10 a month if they remain in the same prescription drug plan, according to the Kaiser Family Foundation, a health policy research organization. And since 2006, some of the steepest increases have been in the most popular plans.

Saving by switching

The cost of Medicare Advantage plans, which often include prescription drug coverage, also can change from year to year.

Roughly 11.1 million people now get coverage through the plans, or nearly one in four people covered by Medicare. That includes an estimated 261,000 people, out of the 900,000 covered by Medicare, in Wisconsin.

Although people each year are encouraged to make sure their plan is still the best deal out there, most don't bother.

That can be a mistake. Some people can save hundreds of dollars a year by switching plans, said Short of the Elder Law Center. And in some cases, counselors at the center have saved people thousands of dollars.

"It's incredible how absolutely important it is," Short said.

Finding the best plan also is nearly impossible - given all the permutations in premiums, deductibles, covered drugs and such - without calling the helplines at Medicare or the Elder Law Center or using the online tool available at www.medicare.gov.

The online tool at Medicare's website does a fairly good job in helping to sort through the options ensuring a drug is covered by a plan, said Brent J. Eberle, vice president of clinical pharmacy services at Navitus Health Solutions, a pharmacy benefits manager in Madison owned by Dean Health Plan.

Many people are not aware that they also may be eligible for help with their monthly premiums. Subsidies are available to people with incomes of less than $16,245 a year and with less than $12,510 in assets.

About 32% of the people with Part D coverage in Wisconsin receive the subsidy. But an estimated 2.3 million people eligible - or almost one in five - had not signed up for the subsidy as of February 2009, according to the Kaiser Family Foundation.

People can sign up at their county department of aging.

"It's pretty painless," said Short.

The 32 prescription drug plans available next year in Wisconsin are down from 48 last year and a peak of 57 in 2008, according to the Kaiser Family Foundation. But that's still an intimidating number of choices.

Studies show that people are more likely to shop for the best deal when they have fewer choices. For this reason, Medicare put in place new regulations in 2009 to reduce duplicative plans and plans with few customers.

Major changes

When two drug plans have been consolidated, if people don't pick a new plan, they will automatically be enrolled in a plan from the same company that offers benefits that are the most similar to their previous plan.

The biggest change next year will be the 50% discount on branded prescription drugs and a 7% discount for generic drugs when people reach the coverage gap. The gap begins at $2,840 next year and ends at $6,448 when people become eligible for catastrophic coverage.

The health care reform law reduces branded prescription drugs to 25% of their cost by 2020.

"It's a much richer benefit now that the coverage gap is closing," said Scott Jacoby, who oversees the Medicare Part D program for Navitus.

An estimated 14% of the people covered by the Medicare plans reach the coverage gap.

Another change affects people with higher incomes - more than $85,000 a year for one person and $170,000 for couples - who will pay more for their Medicare Part D coverage.

Medicare Advantage

Fewer Medicare Advantage plans also will be available next year.

A law passed in 2008 required the plans to contract with doctors and hospitals in most counties as opposed to paying rates similar to what traditional Medicare pays. That prodded companies to stop offering some plans in some markets.

About 20 Medicare Advantage plans are available in Wisconsin. And here, too, people are wise to shop each year.

"If you are going to be on autopilot, it can cost you a lot of money," said Kevin Truebenbach of Liberty Insurance Group in Brookfield.

Medicare Advantage plans enable people to forgo the expense of buying supplemental insurance to pay for costs not covered by traditional Medicare. They also can offer additional benefits, such as gym memberships.

But people need to check what doctors, hospitals and other health care providers are in the plans' networks and what they will pay to see a physician or if they are hospitalized.

William Kravit, president of FHK Corp., an insurance broker in Glendale, said premiums this year have been stable or even slightly lower.

• People will not be able to switch to a different Medicare Advantage plan after Jan. 1. In past years, they could change plans through Feb. 14. They will be able to switch to traditional Medicare and pick a prescription drug plan.

The Medicare Advantage plans cost the federal government more than traditional Medicare - about 9% more this year. The health care reform law over time will bring the payments more in line with the cost of traditional Medicare.

The changes are projected to reduce Medicare spending by $136 million over 10 years. That is expected to result in fewer benefits or higher premiums, although any changes may be less in Wisconsin than other parts of the country under the formula used to pay the private companies.

The changes, though, will hit in coming years.

Still, there are enough other changes this year to keep people busy. And though the counselors at the Elder Law Center's helpline are swamped, they still want people to draw on them to find the best plan.

"We are worried we can't keep up." Short said. "But we want people to call. Please call."

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Where to find help

Help finding the right Medicare prescription drug plan is available by calling the Elder Law Center's Medicare Part D Prescription Drug Helpline at (866) 456-8211.

People also can call (800) 633-4227).

People who are covered by Medicare because they are disabled can call Disability Rights Wisconsin's helpline at (800) 926-4862.

A personalized comparison of costs and coverage for Medicare plans is available at www.medicare.gov.

People who are not eligible for Medicaid but who have incomes of less than $16,245 a year and less than $12,510 in assets can apply for extra help online at www.socialsecurity.gov/prescriptionhelpor call (800) 772-1213.